| Mon 19 Mar 2012, 17:29 | | BSS - BSI Steel Limited - Acquisition by BSI of 10 |
|
BSS
BSS
BSS - BSI Steel Limited - Acquisition by BSI of 100% of Brown Mcfarlane
Africa (Pty) Ltd ("BMFA") and West Dunes (Pty) Ltd ("WD") cautionary
announcement
BSI STEEL Limited
(Incorporated in the Republic of South Africa)
(Registration number 2001/023164/06)
JSE code: BSS
ISIN: ZAE000125134
("BSI" or "the company")
ACQUISITION BY BSI OF 100% OF BROWN McFARLANE AFRICA (PTY) LTD ("BMFA") AND
WEST DUNES (PTY) LTD ("WD") CAUTIONARY ANNOUNCEMENT
1 DETAILS OF THE TRANSACTION
Shareholders are advised that BSI has entered into an agreement with A.R.
Brown McFarlane and Company Limited ("ARBMF") and The Fish Eagle Trust
("FET") ("the sellers") for the acquisition by BSI of 100% of the shares and
shareholder loans in BMFA and WD, for an estimated purchase consideration of
R35 million in cash("the acquisition"), being the estimated net asset value
of the entities. Post the acquisition BMFA and WD will be wholly owned
subsidiaries of BSI.
2 RATIONALE FOR THE ACQUISITION
BSI`s growth strategy is underpinned by expanding our geographic footprint &
product range. BMFA meets both these criteria, giving us a footprint in
Richards Bay as well as increasing our plate sales, especially in quenched &
tempered grades. BMFA also provides extra processing capacity to BSI`s
existing service centre.
3 PURCHASE PRICE
The purchase consideration will be paid to the sellers as follows:
3.1 BSI will pay ARBMF the face value of ARBMF`s portion of the loan
accounts as determined on the effective date. BSI will acquire ARBFM`s
shares for 65% of R35 million less the amount paid for ARBMF`s portion
of the loan accounts.
3.2 BSI will pay FET the face value on FET`s portion of the loan accounts as
determined on the effective date. BSI will acquire FET`s shares for an
amount determined by valuing the net asset value of BMFA on 30 September
2012 together with the face value of the loan accounts as determined on
the effective date ("the fair value"), which gross payment to FET cannot
exceed R30 million to be determined as follows:
3.2.1 Should the fair value of BMFA be equal to or less than R35 million,
the difference between the net asset value and the share price paid
to ARBMF; or
3.2.2 Should the fair value of BMFA be greater than R35 million, then 35%
of the net asset value.
4 NATURE OF THE BMA AND WD BUSINESSES
4.1 BMFA is a plate service centre & trading business. Approximately 70% of
the material sold is processed through the service centre, where value
is added through processes including cutting to shape, rolling &
drilling. BMFA have two processing centres, one in Richards Bay & the
other in Dunswart, Gauteng.
4.2 WD is a property holding company, which owns the Richards Bay property.
5 EFFECTIVE DATE
The effective date of the acquisition is 01 March 2012.
6 CONDITIONS PRECEDENT
The outstanding conditions precedent include, inter alia, the completion of a
due diligence, the approval of the Competition Commission , employment
contracts being concluded or extended by the sellers to selected key
executives and restraint of trade agreements for a period of 12 months that
are acceptable to BSI.
7 MOI
Upon BMFA and WD becoming subsidiaries of BSI, the MOI`s of BMFA and WD will
be amended to conform to the Listings Requirements of the JSE.
8. CAUTIONARY ANNOUNCEMENT
Shareholders are advised that until the financial effects of the acquisition
are released, if applicable, they should exercise caution when dealing in
their BSI securities on the JSE.
19 March 2012
Johannesburg
Designated Advisor
SASFIN CAPITAL
A DIVISION OF SASFIN BANK LIMITED
Date: 19/03/2012 17:22:01 Produced by the JSE SENS Department.
The SENS service is an information dissemination service administered by the
JSE Limited (`JSE`). The JSE does not, whether expressly, tacitly or
implicitly, represent, warrant or in any way guarantee the truth, accuracy or
completeness of the information published on SENS. The JSE, their officers,
employees and agents accept no liability for (or in respect of) any direct,
indirect, incidental or consequential loss or damage of any kind or nature,
howsoever arising, from the use of SENS or the use of, or reliance on,
information disseminated through SENS.
